AMCON injects N1.5 billion into Arik Air

The Asset Management Company of Nigeria has injected N1.5bn in Arik Airline Ltd to safeguard its operations since its takeover.

The Arik Air Chief Executive Officer, Capt. Roy Ilegbodu, said this at a news conference in Lagos while highlighting the company’s operations since its takeover by AMCON.

Ilegbodu said that the funds injected by AMCON helped in the stabilisation of the airline’s operations, prevention of its collapse and payment of staff salaries.

He said the funds were injected into the company in the first couple of weeks the new management took over the airline.

Ilegbodu said that the management met a lot of refunds when it took over the company, noting that it paid between N60m and N75m to customers as a refund on a weekly basis.

He said that the company had remained in business due to AMCON ‘s support, adding that the support helped in sustaining the airline operations in spite of huge debts incurred before the Federal Government takeover.

He said that AMCON’s intervention in the airline was timely because the things on grounds showed that the company would have collapsed in the next couple of weeks or months.

Ilegbodu said that there were no spare parts in the stores to support the airline’s operations, with huge bills left unpaid and people refusing to offer credits to the company due to the breach of trust.

“When we started on Feb.9, we took our time to study what was on ground in Arik, It was quite interesting and disturbing for an airline with 30 airplanes on its books with only 10 functional,” he said.

He said that AMCON’s intervention helped the company to seek for spare parts, noting that it would be flying 14 airlines by the middle of this month.

The chief executive officer said that the company was engaging its creditors on the way forward, adding that the receiver manager was currently in London to discuss with foreign creditors.

He said KPMG had been appointed to carry out a proper audit of the books, adding that more revelations were coming up on daily basis. According to him, the outcome of the audit will enable the government to decide on the next line of action.

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“We are all looking forward to the closure of the audit because it will show the true position of the company,” he said.

He said that the company slowed down operations by scaling down on international flights, suspended some of its aircraft to have good control of operations because of huge damage discovered in Arik.

“Aviation is a business of a many moving parts. Processes in the industry are very well regulated and guided too. They call it a business of many moving parts and everything is done systematically.

We have managed to stabilise operations and we have been able to clear the staff salaries. A lot of expatriates have been paid to date,” Ilegbodu said.

He added that the company had achieved a level of stability, noting that, passengers number had gone up with the lifting of over 3,000 passengers on April 28.

Ilegbodu said that the company would continue to engage people and manage situations to woo customers back to the airline. He, however, assured customers that things would normalise in the airline in the next couple of weeks.

As I speak we have achieved a level of stability and customers numbers had gone up. We have stabilised operations, the airline will survive and there is a potential for the airline to grow, ” he said.

On the challenges affecting aviation industry, he said that the industry was capital intensive and should be for long-term purpose and not short-term.

He said that Nigeria had the potential to produce the highest airline in Africa based on its population but needed people with the passion, financial muscle and competency.

Ilegbodu listed the instability in the foreign exchange market as another factor affecting the industry, adding that strong business plan was imperative to avert the incessant collapse of airlines.

AMCON, on Feb. 9, took over Arik over a N135bn debt and appointed a new management led by Ilegbodu.

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